Just what you’ve been waiting for, a blog on how an Israeli study, on the impacts of home ownership on lower income neighbourhoods, could affect housing policy in the UK.
The key finding of the study is that as an area moves from being predominantly rented, to predominantly owner occupation, house prices rise.
But thats a bad thing right?
Well maybe not because the research also demonstrates two further things:
1. These tenure changes and upward price impacts tend not to happen in already high price areas, because they are more stable in tenure terms. Always-have-been-always-will-be dominated by owner occupation.
2. The price impacts are generally in working class neighbourhoods and derive from the research finding that a tenure shift from rented to owner occupation tends to drive qualitative improvements in the neighbourhood.
But thats gentrification and thats a bad thing right?
Well it depends where you are looking from? In London, for sure, policy makers need to be aware of price rises and tenure changes potentially squeezing out lower income households in private rented accommodation. Meanwhile social rented households can benefit from the surrounding qualitative improvements.
But once we travel beyond the Home Counties the findings are perhaps more relevant for UK policy makers. Often working class households in fragile neighbourhoods aspire to owner occupation and many want to buy a new build home near where they live.
The research findings perhaps point UK policy makers towards using the planning system to help more working class households to achieve their housing aspirations. Rather than perpetually introducing more new PRS tenants via the “monomaniacal race for high density”, which seems to be the current policy drive in many regional cities.
But what about those rising house prices?
Well lets remember that with interest rates low, and good mortgage availability, housing has never ever been so financially attainable in many working class regional neighbourhoods. Even ignoring the possibility of flat or falling house prices over the next 12-24 months. And the pandemic has revealed, more than ever, the desire of most people to own their own home, with some personal outdoor space, if they can. A desire which is increasing rapidly across Europe.
As always, the best LAs are already looking to drive the right local and long term housing solutions, rather than jumping onto short term investment trends with a highly uncertain long term future.
More private housebuilding can clearly help deliver these improvements and meet aspirations. But it is only part of the solution. Good quality new social housing, in particular via S106 affordable homes, will also be crucial in delivering the vibrant mixed tenure communities which will create the great places aspired to in the Housing White Paper
So more housebuilder/housing association/local authority partnerships perhaps…….?? Sounds sensible to me.
Philip Barnes - Blog 